This slowdown reflects the diminishing impact of the post-pandemic recovery, particularly in Fiji, which accounts for over half of the output of the PIC-11. Fiji’s growth is projected to decelerate to 3.1 per cent, down sharply from 8 per cent in 2023, as economic activity returns to pre-pandemic levels.
Growth across 11 Pacific Island countries this year is estimated to have slowed significantly to 3.6 per cent, following a robust 5.8-per cent expansion in 2023, the World Bank’s Pacific Economic Update said.
The report underscores the urgent need for targeted investment to create jobs, improve infrastructure and build resilience against climate change amid global uncertainty in the region.
Meanwhile, Solomon Islands is expected to see more moderate growth of 2.5 per cent, compared to 3 per cent in 2023, due to structural challenges limiting the economy’s capacity to sustain higher growth rates.
The report, titled ‘Diminishing Growth amid Global Uncertainty: Ramping Up Investment in the Pacific’, underscores the urgent need for targeted investment to create jobs, improve infrastructure and build resilience against climate change amid global uncertainty in the region, the World Bank said in a press release.
These actions are crucial for improving the livelihoods of Pacific communities and narrowing the income gap with higher-income nations.
Growth in the region is settling into a slower pace, signaling a weaker outlook compared to past performance. This slowdown is attributed to weaker investment, increasing climate risks, and structural challenges, all amid continuing global uncertainty that continues to hold back progress.
The report emphasises that without immediate action to ramp up investment, Pacific nations may struggle to reduce poverty or generate new economic opportunities for the region’s people.
The update offers six key recommendations to drive investment and ensure local communities benefit from economic growth. These include greater investment in high-potential sectors like agriculture, sustainable tourism, and the blue economy, which can create jobs and support rural livelihoods.
Improving infrastructure—such as roads, ports, and energy systems—will boost connectivity, enabling businesses to expand and creating more job opportunities.
Building fiscal and climate resilience is also critical. Investing in climate-resilient infrastructure, improving disaster preparedness, and building up financial reserves will protect communities from future shocks and ensure stability.
Attracting private investment will require regulatory reforms to make it easier for businesses to operate, which will promote growth in key sectors and foster local development.
Finally, enhancing access to finance, particularly for small businesses, will be essential for promoting sustainability and driving long-term growth. The report stresses the need to leverage international financial support to drive high-impact projects that directly benefit Pacific communities.
The Economic Update highlights that with the right policies boosting investment, Pacific nations can overcome current economic challenges, build a more resilient future, and create tangible benefits for communities, businesses and governments across the region.
Fibre2Fashion News Desk (DS)
